In the initial seven months of the year, wages in real terms increased outstandingly, by 3.8 percent year-on-year, the Hungarian Central Statistical Office (KSH) reported earlier today. Thus, a positive wage growth trend has been in place for the 31st consecutive month. Compared to July 2014, the number of employees at enterprises with at least five employees was up by 46 thousand.

Within the national economy, gross and net wages – excluding family tax allowances – were HUF 243 400 and HUF 159 400, respectively, which constitutes a year-on-year increase of 3.5 percent, thanks to an unchanged tax regime. Taking into account family tax allowances, KSH estimates that net wages averaged some HUF 166 200.

Excluding the impact of public work schemes, gross wages averaged HUF 261 000 at the private sector, HUF 244 600 at budgetary institutions and HUF 234 600 at non-profit organizations, in January-July 2015.

Thanks to the 0.3 percent drop in consumer prices in the observed period, wages in real terms rose faster than net wages. Thus, wages in real terms were up by 3.8 percent within the national economy, excluding the effect of public work schemes. Within that, the private sector, the public sector and non-profit organizations saw real wage increases of 3.9 percent, 3.3 percent and 3.6 percent, respectively, in the period January-July 2015, excluding the effect of public work schemes. In addition, the wages in real terms of public work employees were also up by 2.9 percent.

As a consequence of wage hikes in the private and public sectors, persistently low inflation and rising minimum wages, wages in real terms have been rising steadily in Hungary and that is a significant driver of economic growth. Avaialable retail sales data also show that the financial status of Hungarian families has also been improving.

For detailed KSH data see: www.ksh.hu.

(Ministry for National Economy)